Ashley Georgeson, Networking Solutions Director*
January 12, 2024
Summary & Immediate Reaction
In case you have missed the noise over the last 72 hours, here are the headlines:
- On Tuesday this week (9th Jan 2024), HPE was rumoured to be in advanced discussions with Juniper regarding an acquisition.
- A day later, this was made official with HPE releasing a press statement to this effect
- The fine points of the deal are anticipated to roll on during the course of the calendar year, perhaps into 2025
- For existing customers, the message is of reassurance and business as usual.
My immediate take for Juniper customers is that this is all about Mist and AI-driven ops, so it validates their technology investment strategy and they can expect the way they use the solution today to only grow as HPE looks to fold this in across the rest of the consolidated portfolio.
HPE/Aruba enterprise networking customers may have more pause for thought as it likely means the Aruba Central management platform will transition towards Mist – Juniper is superior not only in its AI capability but also in its cloud-native architecture.
From a product perspective, there are some key overlaps, HPE will likely follow the strategy they used with Aruba – simply consolidating the line-up at the next product iteration. Customers can expect that all existing install base will be supported through the published EoL notices and service contracts. This should make life easy for customers to transition plan, but we would hope there will be some form of onboarding of HPE products into the ‘new’ management platform – this part will likely take some development effort but is surely feasible in the short term and should be a key aim for HPE to retain market share.
Less Acquisition, More Merger
From the (limited at this point, as you would expect!) information that has been released so far, it certainly seems that we are seeing more of a merger than an acquisition. The HPE networking and Juniper business are roughly the same size, and it has been announced that Juniper’s CEO Rami Rahim will head up HPE’s networking division. While clearly the golden goose for HPE is Juniper’s Mist AI Network Ops platform and how they can monetise that more broadly across the rest of their portfolio, this does leave questions around proposition and portfolio overlap which is not insignificant – there are competing products across core Enterprise Networking solutions (switching, wireless, SD-WAN, NAC & identity) as well as DC networking.
HPE are not newcomers to acquiring networking companies, bringing in Aruba largely successfully in recent years. So it’s reasonable to be optimistic they can pull off the integration and consolidate the product lines with minimal impact on customers.
For Juniper, yes it may be a sad day to see such a well-established brand disappear. As has been well documented HPE will give them new routes to market and support the growth that will foster further innovation that I think more than compensates for the tears.
Possible Market Reaction
The most obvious impact on the market is the reduction at the top end (discounting Huawei for most Western geos) from 4 key players (Cisco, Juniper, HPE & Extreme) to just 3. This is a significant reduction and impact on consumer choice, so we can expect the SEC in the US (and perhaps the CMA in the UK and the EU Competition Commission) will certainly have a look, but should ultimately approve the deal.
I would be surprised if we don’t see some announcements around this soon, although I should certainly expect it to play out quicker than the Broadcom/VMware acquisition that rumbled on interminably, causing unnecessary pain to customers and partners alike.
Another widely reported driver for the move is AI, so we can clearly see that the upswell of momentum is growing. After less than a year since OpenAI raised awareness to the masses and the boardroom, AI is clearly turning the dial of execs. I expect to see everybody up their game in their native AI offering. This is market validation of the importance of network operations and how this can change traditional BAU and support activities, ultimately allowing IT to deliver better services to their businesses and customers. Certainly a win-win!
This really leaves us in fascinating times and charting exciting new Networking waters. We have been looking to longer-term innovations like Space Networking and Quantum to foresee fundamental shifts in how we design, deploy and manage networks, but AI is here today and already making a difference across broad swathes of society – Network Operations is no different.
Customers should see more AI capability and maturity in the market, which can only benefit NetOps teams as they deal with ever more complex environments and business demands.
Interesting links below
Press release: https://www.hpe.com/us/en/newsroom/press-release/2024/01/hpe-to-acquire-juniper-networks-to-accelerate-ai-driven-innovation.html
Forbes article: https://www.forbes.com/sites/stevemcdowell/2024/01/09/a-look-at-hpes-acquisition-of-juniper-networks/?sh=2010bd853167
Forbes article: https://www.forbes.com/sites/rscottraynovich/2024/01/10/here-are-the-keys-to-success-for-hpes-14-billion-juniper-deal/?sh=238331586ac5
SDX central article: https://www.sdxcentral.com/articles/news/hpe-in-advanced-talks-to-acquire-juniper-networks-for-13-billion/2024/01/
The Register article: https://www.theregister.com/2024/01/10/hewlett_packard_enterprise_snaps_up/
Packet Pushers: https://packetpushers.net/blog/with-14-billion-juniper-buy-hpe-gets-an-ai-story-network-market-share-and-lots-of-wlan-questions/
*all opinions are personal
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